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February 20, 2018

33 companies interested in bringing LNG to Lebanon

Last October, Lebanon’s ministry of energy launched a tender to design, finance, build and operate up to 3 liquefied natural gas (LNG) import terminals. At the January deadline, 33 companies expressed interest to bid. Ministry of energy officials say their evaluation of the companies will conclude in early March.

Companies could bid to develop one, two or all three of the selected sites for LNG import terminals at Beddawi in Lebanon’s north, Selaata north of Beirut, and Zahrani in the south of the country. The tender, however, could be much larger than the design and construction of an import terminal. In addition to LNG supply, the scope of the project could include LNG storage, its regasification, the building of a pipeline, and the delivery of a natural gas supply.

A proposed pathway would connect power plants to LNG import terminals (where LNG would be regasified before sending down the pipeline) in two segments. The first is a pipeline stretching from Beddawi near Tripoli through Selaata to Jounieh just north of the capital. A second pipeline would stretch north from Zahrani to Jieh in the south and from Zahrani south to Sour.

According to a ministry of energy document announcing the call, the LNG import terminals, natural gas supply, and pipelines would feed current installed generation capacity at the 3 sites. This includes some 1200 megawatts in current installed capacity, with plans for 850 temporary megawatts in the form of electricity barges and plans for up to 3000 megawatts in fixed generation capacity:

– At Beddawi, 465 megawatts of power generation capacity exist with 569 MW planned plus a planned for a 425 MW barge.

– At Selaata, 194 megawatts of generation capacity at Zouk power plant plus 180 MW from an electricity barge whose non-renewable contract ends in Sept. 2018. The plan is to build 1000 – 1200 megawatts in two phases beginning in 2022.

– At Zahrani, current power generation capacity stands at 465 megawatts with plans for a barge to generate 425 MW plus additional plans for 500 – 600 MW in fixed generation capacity. There is 78 megawatts at Jieh plus an 180 MW barge scheduled to come offline in Sept. 2018. There are plans to construct a 500 – 600 MW power plant that would replace the current 78 MW. At Sour 78 megawatts exist.

The ministry will evaluate the companies applying to prequalify with criteria including a financial test requiring an investment grade or above rating by a recognized rating agency, or proof of revenues over $500 million per year, demonstration of experience of applicable parts of the supply chain, and experience in developing a minimum of 2 similar projects. The ministry of energy is expecting to award the tender by the end of June 2018, according to the document, with commissioning of the LNG import terminal(s) by late 2020.

The tender is not the first attempt by Lebanon to procure a supply of LNG, for which an import terminal is required. In 2014, according to media reports, the ministry had selected a bidder to install an import terminal and had solicited EOIs from companies to import LNG. The ministry had recommended that Cabinet award the license, but no action was taken.